Pharmaceutical Research and Mfrs of America v. McClain, No. 22-3675 (8th Cir. 2024)
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In this case, the United States Court of Appeals for the Eighth Circuit was asked to determine whether Arkansas Code § 23-92-604(c), also known as Act 1103, was preempted by federal law. Act 1103 prohibits pharmaceutical manufacturers from limiting the ability of healthcare providers, who are eligible for drug pricing discounts under the Section 340B Program, to contract with outside pharmacies for drug distribution.
The Pharmaceutical Research and Manufacturers of America (PhRMA) sued the Commissioner of the Arkansas Insurance Department, arguing that Act 1103 was unconstitutional because it was preempted by the Section 340B Program and the Federal Food, Drug, and Cosmetic Act, under theories of field, obstacle, and impossibility preemption.
The court, however, disagreed with PhRMA's arguments. The court found that Act 1103 did not create an obstacle for pharmaceutical manufacturers to comply with 340B, rather it assisted in fulfilling the purpose of 340B. The court also found that Act 1103 did not make it impossible for drug manufacturers and wholesale distributors to comply with the Risk Evaluation and Mitigation Strategies (REMS) Program under the Federal Food, Drug, and Cosmetic Act.
Therefore, the court held that Act 1103 was not preempted by either the Section 340B Program or the Federal Food, Drug, and Cosmetic Act. As such, the court affirmed the district court’s decision in favor of the Intervenors and against PhRMA.
Court Description: [Civil case - Health Care. Plaintiff, an association representing pharmaceutical manufacturers, brought this action against the Arkansas Insurance Department Commissioner in his official capacity, alleging federal law preempted Arkansas Code Sec. 29-93-604(c) (Act 1103), which prohibits manufacturers from limiting certain covered entities' ability to contract with outside pharmacies. Section 304B, 42 U.S.C. Sec. 256b(a)(1) does not preempt Act 1103 under theories of field and obstacle preemption; nor is Act 1103 preempted under an obstacle preemption theory or an impossibility preemption. In sum, Arkansas Act 1103 is not preempted by Section 304B or the FDCA's REMS program.
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